Mj Gleeson Plc · LSE:GLE
Mj Gleeson — FY2015 Earnings Presentation
26 slides from Mj Gleeson's earnings presentation, Sep 28, 2015
Slide 1: Results for the year ended 30 June 2015
MJ Gleeson plc Results for the year ended 30 June 2015
Slide 2: Another year of strong growth
Another year of strong growth Twin track strategy in North and South continues to deliver Homes increased unit sales 34% to 751 (2014: 561) Strategic Land increased operating profits by 68% Unique social regeneration role places Gleeson Homes at the heart of local communities Strongly posi
Slide 3: Financial Review
Financial Review Stefan Allanson Chief Financial Officer MJ Gleeson plc - Results for the Period Ended 30 June 2015 3
Slide 4: Strong financial performance
Strong financial performance Revenue up 44.4% to £117.6m (2014: £81.4m) 30.0 Operating Profit (excluding group overheads) 25.0 Gross profit up 50.7% to £40.3m (2014: £26.7m) 20.0 Homes 17.4 Operating profit up 82.7% to £22.0m (2014: £12.1m) 15.0 £ million 10.0 0.3 9.4 Strategic Reported PBT
Slide 5: Income statement
Income statement Jun-15 Jun-14 Change Notes £m £m Revenue Homes 96.1 70.6 +36.0% Strategic Land 21.5 10.8 +99.2% 117.6 81.4 +44.4% Homes 17.4 9.4 +84.8% £0.8m exceptional credit in 2014 Strategic Land 8.1 4.8 +68.2% Group overhead (2.2) (2.2) Exceptional restructuring cost (1.2) - Operating Profit 2
Slide 6: Profit before tax bridge
£ million 10.0 15.0 20.0 25.0 30.0 5.0 0.0 Year June endJune Yearend 4.8 2013 2013 Homes - volume 4.7 increase Homes - gross 2.5 margin increase Homes - higher MJ Gleeson plc - Results for the Year Ended 30 June 2015 land sales 0.3 Strategic Land - 1.4 higher profit Administration / Profit before ta
Slide 7: Balance sheet
Balance sheet Jun-15 Jun-14 £m £m Homes Land 31.1 30.5 WIP 45.5 42.9 Strategic Land Land 16.7 15.9 WIP 14.9 11.4 Total Inventories 108.2 100.7 Other Assets 44.6 38.2 Other Liabilities (32.1) (24.5) Cash & Cash equivalents 15.8 13.7 Net Assets 136.5 128.1 MJ Gleeson plc- Results for the Year Ended 30
Slide 8: Cash flow
Cash flow Jun 15 Jun 14 £m £m Profit Before Tax from continuing operations 17.3 12.2 Depreciation, loss from discontinued operations and other operating items 0.6 (0.0) Working capital: (14.3) (6.4) Exceptional investment provision 4.9 0.0 Cash generated in operating activities 8.4 5.8 Tax (0.1) 0.0
Slide 9: Dividend
Dividend Final dividend recommended of 7.3 pence per share (2014: 4.9 pence per share) Giving a total dividend for the year of 10.0 pence per share, up 66.7% on previous year (2014: 6.0 pence per share) Aim to maintain dividend cover between two and three times earnings MJ Gleeson plc - Result
Slide 10: Business Review
Business Review Jolyon Harrison Chief Executive Officer MJ Gleeson plc - Results for the Year Ended 30 June 2015 10
Slide 11: Business model & growth drivers
Business model & growth drivers Limited competition No part exchange; No buy to let Customer base highly motivated to become Community regeneration homeowners credentials Gleeson Homes Stringent control of Relieving pressure on social input costs housing stock; helping people out of rent poverty Str
Slide 12: Gleeson Strategic Land
Gleeson Strategic Land Revenue up 99.2% to £21.5m (2014: £10.8m) Operating profit up 68.2% to £8.1m (2014: £4.8m) 3 land sales completed, 2 unconditionally exchanged Combined 62.2 acres for housing development and 1.5 acres commercially consented land 8 new sites secured during year either
Slide 13: Planning status of current portfolio
Planning status of current portfolio Strategic Land sites 4 11 14 Planning consented Planning consented Planning submitted 28 Planning submitted Allocated sites 9 Allocated sites 43 10 Not Allocated Not Allocated 9 18 18 As at 30 June As at 30 June 2013 2015 MJ Gleeson plc - Results for the Year End
Slide 14: Current land market
Current land market Prime “A” Guildford, Twickenham, Surrey , inner M25 Hot interest from all major house builders Prime “B” Shaftesbury, Farnham, Witney, Tunbridge Wells, Haywards Heath Very hot interest from Builders building less than 2,500 units a year. Major house builders will bid but generall
Slide 15: Gleeson Homes
Gleeson Homes Unit sales up 34% to 751 (2014: 561) ASP increased 1.9% to £123,750 (2014: £121,500) 46% sold with H2B 89% sold from newer higher margin sites (2014: 84% ) Average 39 sales outlets open during year (2014: 33) Expected to increase to > 45 this year Land pipeline 3,680 plot
Slide 16: Gleeson Homes land pipeline and sources
Gleeson Homes Land Pipeline Land source Private House individuals, 19% builder, Utility, Farmer, 8% Private companies, 29% Local Authority, 29% Gov't, Church, NHS, University, Charity, 15% Pipeline additions in 2014 and 2015 Private companies, individuals and organisations Government and other non-p
Slide 17: Gleeson Homes
Gleeson Homes Gleeson Homes continues to take advantage of competitive land prices in its target areas MJ Gleeson plc - Results for the Year Ended 30 June 2015 17
Slide 18: Keeping subcontractors under control
Keeping subcontractors under control We have introduced a Rapid Payment Scheme as a means of keeping subcontractors under control. Subcontractors are scored for the quality of their service and workmanship Grade A subcontractors are paid within 14 days of invoice. Grade B subcontractors are
Slide 19: Properly controlling forward orders
Properly controlling forward orders The first phase of c.12 houses of each site is released for sale off plan, giving us a strong indicator of demand. Thereafter we release houses for sale only when we have constructed the foundation slab. Advantages: We are selling a tangible item – results in a
Slide 20: Community Matters
Community Matters We work in challenging communities to help families on low incomes out of housing poverty that the rent-trap can bring and into home ownership and wealth creation. Anti-social behaviour, vandalism and theft are not unusual in the areas where we build. We have responded to this by c
Slide 21: Community Matters
Community Matters We work closely with local schools to ensure that trespass onto our sites is minimised. This young lady has won a “Design a Bedroom” competition which has been created in the show house Because we build homes for people on low incomes it is totally appropriate for us to support liv
Slide 22: Future opportunities
Future opportunities We have a proven model We have visibility on our medium term target to build 1,000 houses a year: we are now reviewing opportunities for the further growth beyond. We have analysed house selling prices in a number of regions and adjusted them for the Gleeson product and fu
Slide 23: Future opportunities
Future opportunities Pop: 8.8m Pop: 10.1m Pop: 9.8m Asp: £137k Asp: £145k Asp:£171k Gleeson Asp: £120k Gleeson Asp: £127k Gleeson Asp: £150k Gleeson 2bs: £102k Gleeson 2bs: £108k Gleeson 2bs: £128k Income rqd: £21k Income rqd: £23k Income rqd: £27K Bottom 10%: £28k Bottom 10%: £28k Bottom 10%:£29k B
Slide 24: Structure to support growth
Structure to support growth CHIEF EXECUTIVE OFFICER HEAD OFFICE LAND SALES TECHNICAL BUILD MATERIALS COMMERCIAL Regional Director Regional Director Regional Director YORKSHIRE & NORTH EAST NORTH MIDLANDS NORTH WEST SHEFFIELD WAKEFIELD BURY LIVERPOOL ? NORTH SOUTH LAND LAND LAND LAND LAND LAND SALES
Slide 25: Summary and outlook
Summary and outlook Market conditions in Homes remain favourable to our unique model; we will continue to grow: Good mortgage availability for our customer base Sales outlets expected to increase this year to > 45 ASP increases expected to be modest Building up land pipeline Expecting to
Slide 26: MJ Gleeson plc
gleeson MJ Gleeson plc